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Battle over foundation hospitals continues
FEATURE
FEATURE
Battle over foundation hospitals continues Downing Street sells one model to managers, another to Labour members of parliament he battle over the introduction of foundation hospitals into England’s national health service (NHS) is not over yet. Opposition within the Labour party to the government’s controversial plan—establishment of public non-profit hospitals funded by taxpayers but with more freedom than conventional NHS hospitals—continues to grow. In May, 65 Labour members of parliament (MPs) voted against the hospitals and 50 abstained. In July, as the Health and Care Bill finally passed through the Commons, this rebel group of 115 grew to 134 (62 against including eight former ministers, plus 72 not voting). The plan survived but with Labour, which has a working majority of 164, recording its smallest majority (35)
T
on his summer holidays, Tony Blair could not have been more bullish. He talked of inviting even more hospitals for the programme’s second year, before the first year has even started. It was the Labour chairman of the influential Commons committee on health, David Hinchliffe, who suggested the idea had been dashed off “on the back of an envelope to inject more competition”. However, the initial idea was based on visits to three European hospitals, whose managers were brought to a London conference in May, 2002, to describe how they operated (see Lancet 2002; 359: 1928). The European foundation models were the Karolinska Hospital in Sweden, the Copenhagen Hospital Corporation
PA Photos
Rights were not granted to include this image in electronic media. Please refer to the printed journal.
Former Health Secretary, Alan Milburn
since it was returned to power 6 years ago. The size of this revolt gives a green light to the peers to challenge the proposals when the bill reaches the House of Lords in September. There will be further trouble at Labour’s annual conference in September, with three of the biggest unions campaigning to block the change. There is no sign that Downing Street is ready to make any more concessions. At his last press conference before going
540
and Insalud in Denmark, and the Foundation Hospital Alcorcan in Spain. This was the conference where Alan Milburn, the former Health Secretary, completed his U-turn. Less than 1 year earlier he had declared: “Thankfully we have a monopoly provider and that is the national health service, and as long as there is a Labour government in power, that will remain the case.” But in May, 2002, Milburn confirmed that foundation hospitals would be going
ahead and private sector hospitals would also be given a permanent NHS role. This would help tackle both the UK’s capacity problem and its structural weaknesses too, “not least its top-down centralised system that inhibits local innovation and its monolithic structures that denies patients choice”, Milburn said. The original model would have given foundation hospitals wide freedom from central controls, including new powers to borrow funds from the private sector, make their own investments, vary staff pay, and retain the proceeds of land sales. As opposition to the proposal has grown, a series of concessions has been made to appease backbench Labour MPs. They were concerned the NHS would be turned into a two-tier system with the elite foundation hospitals—all of which had to be drawn from top performing hospitals—able to poach staff from their own local hospitals farther down the road. In the past year the concessions have included tighter controls over borrowing; no greater flexibility over pay than conventional NHS hospitals; a legal duty to cooperate with other units in the NHS; new curbs restricting the expansion of private patients; the continuation of regular scrutiny from health inspectors; an obligation to meet the 47 national performance targets set for the NHS; and a new rule making the foundation hospital regulator report to parliament as well as the Health Secretary. Two competing models of foundation hospitals have been sold by Downing Street. The message to NHS managers has been that foundation hospitals would provide much more autonomy to local managements in a genuine devolution of power. This is what prompted more than 30 of the 52 top performing three-star hospitals in 2002 to apply for foundation status. By July, 2003, there were 29 still on the list. Some had been removed after the Audit Commission, an independent watchdog on public spending, noted that some of the three-star hospitals did not have the management capacity to take on the new role. In mid-July, the total shrank to 25 when four of last year’s top performers lost one of their three stars in this year’s ratings awards by the inspectors of the Commission for Health Improvement. Only three-star hospitals are eligible for foundation status. Ironically, even though most NHS chief executives support the plan because of the increase in managerial
THE LANCET • Vol 362 • August 16, 2003 • www.thelancet.com
For personal use. Only reproduce with permission from The Lancet
FEATURE
Rights were not granted to include this image in electronic media. Please refer to the printed journal.
Science Photo Library
autonomy, they still have serious reservations. In a survey released in July by the NHS Confederation, an umbrella group representing a cross section of NHS management groups, two-thirds of chief executives believed foundation hospitals would make cooperation between the different sections of the NHS more difficult, just at the time when policy-makers were trying to achieve better integration between primary and hospital care. Only a third thought they would improve patient care, with a quarter believing they would make it worse. But the message from Downing Street to unhappy Labour MPs was quite different. It emphasised the links the non-profit foundation hospitals would have with earlier progressive institutions, like cooperative or mutual societies of an earlier era. This prompted 29 Labour MPs to introduce a successful amendment to the bill that imposes a legal duty on foundation hospitals to be “grounded in the local community”. Downing Street points to the contradiction in current opinion polls, which foundation hospitals might resolve. The NHS wins high marks for hospital care in patient surveys. There are complaints about poor communication by doctors and too little involvement of patients in their care, but the latest survey, released in July, shows a good overall approval rating for the NHS (74% “excellent” or “very good”), with 92% ready to recommend the hospital to a relative or friend. However, when the same people are asked whether the NHS in general is improving, rather than their own experience of it, satisfaction rates plummet. Part of this is undoubtedly the sustained attack on the NHS by Conservative-supporting tabloid newspapers, and the Conservative party itself, which a leaked strategy speech revealed, is deliberately trying to persuade the public the NHS is not working and can never work. Downing Street argues that by making the NHS more locally based—all 300 hospital trusts are due to be offered foundation status over the next 4 to 5 years—the popularity of the NHS could be restored. It used to be more popular than the royal family. Yet even the friends of foundation hospitals are worried by its governance proposals. Each hospital will have to reserve places on its board for representatives from a local council, a local primary care trust (PCT), and staff representatives. Most hospitals will be
Patient satisfaction with hospital care is good
serving more than one council and more than one PCT. But the boards are required to have deeper democratic roots than this. Each will be expected to compile registers of members, chosen from local residents and recent patients, and organise elections for a majority of places on the boards. John Charlton, the chairman of University Hospital Birmingham, who is in favour of the idea, told the annual conference of the Confederation in July:
“by making the NHS more locally based . . . the popularity of the NHS could be restored. It used to be more popular than the royal family” “Yes, let’s have autonomy, let’s have accountability, but for goodness sake don’t expect us to have a 5000 strong membership. That would be an absolute nightmare.” Peter Dixon, the chairman of University College Hospital, London, another supporter, was equally opposed to the search for community roots. He believed there would be irreconcilable differences: “We will be choosing between the Hampstead Conservation Society and the local Trotskyists.” The government’s argument for the hospitals is undermined by the contradictory messages it has given out. First, the different messages to chief executives and MPs. Second, the clear intention of introducing competition into the hospital sector, but then conceding to a clause in the bill which requires cooperation. Third, the creation of PCTs as the main commissioners of hospital care has been compromised by giving foundation hospitals more
freedom to decide their own priorities and initiative. Fourth, the strict rule that only three-star hospitals qualify for foundation status, followed by a concession that all 300 trusts, of whom 14 in July had scored no stars, could reach it within 4 years. Fifth, the increased legitimacy given to foundation hospitals with their locally elected committees, compared with PCTs. The Conservatives made the same mistake in their 1991 reorganisation, giving providers more status than commissioners, thus ensuring the best managers went to the providers. Surely it is the PCTs that are there to decide what services should be commissioned that need democratic legitimacy, not the providers. There has been a belated promise to extend locally elected boards to PCTs at some unspecified time in the future. There is a final paradox. For the past 12 months, foundation hospitals have dominated the health debate in parliament and the media. Yet, as the recent NHS Confederation survey of chief executives documented, there are at least four Labour policies that are likely to have a greater effect on the health service: a new expansion of patient choice as a driver in health-care provision; new staff contracts requiring more flexible roles; a new system of payments by results (with funds following the patient) that began in April; and the massive £5 billion investment in information technology over the next 3 years with the aim of integrating primary and hospital care records. None of these have received anything like as much attention. Malcolm Dean
THE LANCET • Vol 362 • August 16, 2003 • www.thelancet.com
For personal use. Only reproduce with permission from The Lancet
541
FEATURE
Battle over foundation hospitals continues Downing Street sells one model to managers, another to Labour members of parliament he battle over the introduction of foundation hospitals into England’s national health service (NHS) is not over yet. Opposition within the Labour party to the government’s controversial plan—establishment of public non-profit hospitals funded by taxpayers but with more freedom than conventional NHS hospitals—continues to grow. In May, 65 Labour members of parliament (MPs) voted against the hospitals and 50 abstained. In July, as the Health and Care Bill finally passed through the Commons, this rebel group of 115 grew to 134 (62 against including eight former ministers, plus 72 not voting). The plan survived but with Labour, which has a working majority of 164, recording its smallest majority (35)
T
on his summer holidays, Tony Blair could not have been more bullish. He talked of inviting even more hospitals for the programme’s second year, before the first year has even started. It was the Labour chairman of the influential Commons committee on health, David Hinchliffe, who suggested the idea had been dashed off “on the back of an envelope to inject more competition”. However, the initial idea was based on visits to three European hospitals, whose managers were brought to a London conference in May, 2002, to describe how they operated (see Lancet 2002; 359: 1928). The European foundation models were the Karolinska Hospital in Sweden, the Copenhagen Hospital Corporation
PA Photos
Rights were not granted to include this image in electronic media. Please refer to the printed journal.
Former Health Secretary, Alan Milburn
since it was returned to power 6 years ago. The size of this revolt gives a green light to the peers to challenge the proposals when the bill reaches the House of Lords in September. There will be further trouble at Labour’s annual conference in September, with three of the biggest unions campaigning to block the change. There is no sign that Downing Street is ready to make any more concessions. At his last press conference before going
540
and Insalud in Denmark, and the Foundation Hospital Alcorcan in Spain. This was the conference where Alan Milburn, the former Health Secretary, completed his U-turn. Less than 1 year earlier he had declared: “Thankfully we have a monopoly provider and that is the national health service, and as long as there is a Labour government in power, that will remain the case.” But in May, 2002, Milburn confirmed that foundation hospitals would be going
ahead and private sector hospitals would also be given a permanent NHS role. This would help tackle both the UK’s capacity problem and its structural weaknesses too, “not least its top-down centralised system that inhibits local innovation and its monolithic structures that denies patients choice”, Milburn said. The original model would have given foundation hospitals wide freedom from central controls, including new powers to borrow funds from the private sector, make their own investments, vary staff pay, and retain the proceeds of land sales. As opposition to the proposal has grown, a series of concessions has been made to appease backbench Labour MPs. They were concerned the NHS would be turned into a two-tier system with the elite foundation hospitals—all of which had to be drawn from top performing hospitals—able to poach staff from their own local hospitals farther down the road. In the past year the concessions have included tighter controls over borrowing; no greater flexibility over pay than conventional NHS hospitals; a legal duty to cooperate with other units in the NHS; new curbs restricting the expansion of private patients; the continuation of regular scrutiny from health inspectors; an obligation to meet the 47 national performance targets set for the NHS; and a new rule making the foundation hospital regulator report to parliament as well as the Health Secretary. Two competing models of foundation hospitals have been sold by Downing Street. The message to NHS managers has been that foundation hospitals would provide much more autonomy to local managements in a genuine devolution of power. This is what prompted more than 30 of the 52 top performing three-star hospitals in 2002 to apply for foundation status. By July, 2003, there were 29 still on the list. Some had been removed after the Audit Commission, an independent watchdog on public spending, noted that some of the three-star hospitals did not have the management capacity to take on the new role. In mid-July, the total shrank to 25 when four of last year’s top performers lost one of their three stars in this year’s ratings awards by the inspectors of the Commission for Health Improvement. Only three-star hospitals are eligible for foundation status. Ironically, even though most NHS chief executives support the plan because of the increase in managerial
THE LANCET • Vol 362 • August 16, 2003 • www.thelancet.com
For personal use. Only reproduce with permission from The Lancet
FEATURE
Rights were not granted to include this image in electronic media. Please refer to the printed journal.
Science Photo Library
autonomy, they still have serious reservations. In a survey released in July by the NHS Confederation, an umbrella group representing a cross section of NHS management groups, two-thirds of chief executives believed foundation hospitals would make cooperation between the different sections of the NHS more difficult, just at the time when policy-makers were trying to achieve better integration between primary and hospital care. Only a third thought they would improve patient care, with a quarter believing they would make it worse. But the message from Downing Street to unhappy Labour MPs was quite different. It emphasised the links the non-profit foundation hospitals would have with earlier progressive institutions, like cooperative or mutual societies of an earlier era. This prompted 29 Labour MPs to introduce a successful amendment to the bill that imposes a legal duty on foundation hospitals to be “grounded in the local community”. Downing Street points to the contradiction in current opinion polls, which foundation hospitals might resolve. The NHS wins high marks for hospital care in patient surveys. There are complaints about poor communication by doctors and too little involvement of patients in their care, but the latest survey, released in July, shows a good overall approval rating for the NHS (74% “excellent” or “very good”), with 92% ready to recommend the hospital to a relative or friend. However, when the same people are asked whether the NHS in general is improving, rather than their own experience of it, satisfaction rates plummet. Part of this is undoubtedly the sustained attack on the NHS by Conservative-supporting tabloid newspapers, and the Conservative party itself, which a leaked strategy speech revealed, is deliberately trying to persuade the public the NHS is not working and can never work. Downing Street argues that by making the NHS more locally based—all 300 hospital trusts are due to be offered foundation status over the next 4 to 5 years—the popularity of the NHS could be restored. It used to be more popular than the royal family. Yet even the friends of foundation hospitals are worried by its governance proposals. Each hospital will have to reserve places on its board for representatives from a local council, a local primary care trust (PCT), and staff representatives. Most hospitals will be
Patient satisfaction with hospital care is good
serving more than one council and more than one PCT. But the boards are required to have deeper democratic roots than this. Each will be expected to compile registers of members, chosen from local residents and recent patients, and organise elections for a majority of places on the boards. John Charlton, the chairman of University Hospital Birmingham, who is in favour of the idea, told the annual conference of the Confederation in July:
“by making the NHS more locally based . . . the popularity of the NHS could be restored. It used to be more popular than the royal family” “Yes, let’s have autonomy, let’s have accountability, but for goodness sake don’t expect us to have a 5000 strong membership. That would be an absolute nightmare.” Peter Dixon, the chairman of University College Hospital, London, another supporter, was equally opposed to the search for community roots. He believed there would be irreconcilable differences: “We will be choosing between the Hampstead Conservation Society and the local Trotskyists.” The government’s argument for the hospitals is undermined by the contradictory messages it has given out. First, the different messages to chief executives and MPs. Second, the clear intention of introducing competition into the hospital sector, but then conceding to a clause in the bill which requires cooperation. Third, the creation of PCTs as the main commissioners of hospital care has been compromised by giving foundation hospitals more
freedom to decide their own priorities and initiative. Fourth, the strict rule that only three-star hospitals qualify for foundation status, followed by a concession that all 300 trusts, of whom 14 in July had scored no stars, could reach it within 4 years. Fifth, the increased legitimacy given to foundation hospitals with their locally elected committees, compared with PCTs. The Conservatives made the same mistake in their 1991 reorganisation, giving providers more status than commissioners, thus ensuring the best managers went to the providers. Surely it is the PCTs that are there to decide what services should be commissioned that need democratic legitimacy, not the providers. There has been a belated promise to extend locally elected boards to PCTs at some unspecified time in the future. There is a final paradox. For the past 12 months, foundation hospitals have dominated the health debate in parliament and the media. Yet, as the recent NHS Confederation survey of chief executives documented, there are at least four Labour policies that are likely to have a greater effect on the health service: a new expansion of patient choice as a driver in health-care provision; new staff contracts requiring more flexible roles; a new system of payments by results (with funds following the patient) that began in April; and the massive £5 billion investment in information technology over the next 3 years with the aim of integrating primary and hospital care records. None of these have received anything like as much attention. Malcolm Dean
THE LANCET • Vol 362 • August 16, 2003 • www.thelancet.com
For personal use. Only reproduce with permission from The Lancet
541